[Federal Register Volume 69, Number 23 (Wednesday, February 4, 2004)]
[Rules and Regulations]
[Pages 5257-5258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2149]



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  Federal Register / Vol. 69, No. 23 / Wednesday, February 4, 2004 / 
Rules and Regulations  

[[Page 5257]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 532

RIN 3206-AJ78


Prevailing Rate Systems; Redefinition of the North Dakota and 
Duluth, MN, Appropriated Fund Wage Areas

AGENCY: Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management is issuing a final rule to 
redefine the North Dakota and Duluth, MN, Federal Wage System (FWS) 
appropriated fund wage areas. This rule redefines Clearwater and 
Mahnomen Counties and the White Earth Indian Reservation portion of 
Becker County from the North Dakota FWS wage area to the Duluth FWS 
wage area. These changes assign all blue-collar Federal employees 
working in Indian Health Service facilities in northern Minnesota to 
one FWS wage schedule.

DATES: Effective Date: This regulation is effective on the first day of 
the first applicable pay period beginning on or after March 5, 2004.

FOR FURTHER INFORMATION CONTACT: Mark A. Allen at (202) 606-2838, e-
mail [email protected], or FAX: (202) 606-4264.

SUPPLEMENTARY INFORMATION: On August 22, 2003, the Office of Personnel 
Management (OPM) published a proposed rule (68 FR 50727) to redefine 
the North Dakota and Duluth, MN, Federal Wage System (FWS) appropriated 
fund wage areas. The proposed rule had a 30-day public comment period. 
OPM received 3 comments: one from the Minnesota National Guard Adjutant 
General Office; 1 from the manager of the Minnesota Army National Guard 
Organizational Maintenance Shop Number Five, Detroit Lakes; and 1 from 
an employee representative of FWS workers at the Detroit Lakes 
Maintenance Shop, Becker County, MN.
    The proposed rule would redefine Clearwater and Mahnomen Counties 
and the White Earth Indian Reservation portion of Becker County from 
the North Dakota FWS wage area to the Duluth FWS wage area. Public 
comments supported these changes but also asked that OPM define all of 
Becker County, MN, to the Duluth wage area.
    We proposed redefining Clearwater and Mahnomen Counties and the 
White Earth Indian Reservation portion of Becker County to the Duluth 
wage area because FWS employees who work for closely related Bemidji 
Area Indian Health Service (IHS) facilities in northern Minnesota are 
currently in two separate FWS wage areas. The Department of Health and 
Human Services requested that OPM redefine the North Dakota and Duluth 
wage areas so that blue-collar employees of its IHS facilities in 
northern Minnesota would be covered by one wage schedule.
    OPM considers the following regulatory criteria under 5 CFR 532.211 
when defining FWS wage area boundaries:
    (i) Distance, transportation facilities, and geographic features;
    (ii) Commuting patterns; and
    (iii) Similarities in overall population, employment, and the kinds 
and sizes of private industrial establishments.
    Based on our analysis of the regulatory criteria for defining 
appropriated fund FWS wage areas, we find that the criteria for 
Clearwater, Mahnomen, and Becker counties do not strongly favor 
defining the counties to one FWS wage area more than another. However, 
the IHS medical centers in northern Minnesota are in an unusual 
situation in that they are in a rural area that is economically and 
socially integrated by the local reservation system and not strongly 
integrated with the labor markets in either the North Dakota or Duluth 
FWS survey areas. It is desirable to have IHS employees aligned under 
one wage schedule because the area and population serviced by the 
medical centers serve as a unique labor market. However, there is 
insufficient private sector industry and FWS employment in northern 
Minnesota to meet OPM's regulatory requirements for establishing a 
separate FWS wage area for the IHS employees there. Because it is not 
feasible to establish a separate FWS wage area for IHS employees in 
northern Minnesota, the FWS employment locations must be defined to the 
area of application of an existing FWS wage area.
    Analysis of OPM's regulatory criteria for defining FWS wage areas 
shows that the majority of IHS employment locations under the Bemidji 
Area in northern Minnesota are more closely aligned with the Duluth 
wage area than the North Dakota wage area. The White Earth, Red Lake, 
and Cass Lake Indian Health Centers are part of the Bemidji Area but 
their associated reservations are not currently located entirely within 
the Duluth wage area. The White Earth Indian Reservation occupies the 
northern portion of Becker County and most of Mahnomen County, while 
the Red Lake and Cass Lake Indian Reservations occupy the northern 
portions of Clearwater County. We therefore proposed that Clearwater 
and Mahnomen Counties be redefined from the North Dakota wage area to 
the Duluth wage area. We also proposed that the White Earth Indian 
Reservation portion of Becker County be redefined from the North Dakota 
wage area to the Duluth wage area. There are 11 IHS employees in Becker 
County and none in Clearwater or Mahnomen counties. There are several 
FWS employees stationed in the part of Becker County that we did not 
propose to define to the Duluth wage area.
    The comments OPM received from Minnesota National Guard managers 
and employees request that all of Becker County, rather than just the 
White Earth Indian Reservation portion, be defined to the Duluth wage 
area. The reasons cited in the requests include organizational 
relationships in the Minnesota National Guard's Maintenance Division, 
the cost of living in Becker County, and an analysis of economic and 
salary indicators. Comments cited the fact that the Minnesota National 
Guard's Maintenance Division has similar facilities with similar blue-
collar workforces in Detroit Lakes (Becker County), Cloquet (Carlton 
County), and Hibbing (St. Louis County).
    We do not find a compelling reason to place all of Becker County in 
the Duluth wage area. Both Cloquet and Hibbing are located in the 
Duluth FWS

[[Page 5258]]

survey area while Detroit Lakes is only 26 kilometers, or 16 miles, 
from the North Dakota FWS survey area. Under the statutory principles 
for determining FWS pay, we find that pay rates for FWS employees at 
Minnesota National Guard facilities in Detroit Lakes, Cloquet, and 
Hibbing are appropriate. We find no compelling reason that FWS pay 
rates should be the same in Detroit Lakes as in Cloquet or Hibbing. 
Detroit Lakes has little linkage with the labor market in the Duluth 
survey area while it has a significant linkage with the North Dakota 
survey area. For example, commuting rates from the 2000 Census show 
that only 0.03 percent of the Becker County resident workforce commutes 
to work in the Duluth FWS survey area. In comparison, 8.8 percent of 
the Becker County resident workforce commutes to work in the North 
Dakota FWS survey area.
    We believe the mixed nature of the regulatory analysis findings for 
Becker County, including demographic and industry patterns, indicates 
that the non-IHS employment locations in Becker County should remain 
appropriately defined to the North Dakota wage area. Because the pay of 
FWS employees must be based on the local cost of labor rather than the 
local cost of living, the local cost of living is not a factor OPM 
considers when defining FWS wage area boundaries.
    The Federal Prevailing Rate Advisory Committee (FPRAC), the 
national labor-management committee that advises OPM on FWS pay 
matters, reviewed and recommended these changes by consensus. Based on 
its review of the regulatory criteria for defining FWS wage areas, 
FPRAC recommended no other changes in the geographic definitions of the 
North Dakota and Duluth wage areas. The affected IHS employees in 
Becker County must be placed on the wage schedule for the Duluth wage 
area on the first day of the first applicable pay period beginning 30 
days after the date this final regulation is published in the Federal 
Register.

Regulatory Flexibility Act

    I certify that these regulations would not have a significant 
economic impact on a substantial number of small entities because they 
would affect only Federal agencies and employees.

List of Subjects in 5 CFR Part 532

    Administrative practice and procedure, Freedom of information, 
Government employees, Reporting and recordkeeping requirements, Wages.

    U.S. Office of Personnel Management.
Kay Coles James,
Director.

0
Accordingly, the Office of Personnel Management is amending 5 CFR part 
532 as follows:

PART 532--PREVAILING RATE SYSTEMS

0
1. The authority citation for part 532 continues to read as follows:

    Authority: 5 U.S.C. 5343, 5346; Sec. 532.707 also issued under 5 
U.S.C. 552.


0
2. In appendix C to subpart B, the wage area listing for the State of 
Minnesota is amended by revising the listing for Duluth; and for the 
State of North Dakota, to read as follows:

Appendix C to Subpart B of Part 532--Appropriated Fund Wage and Survey 
Areas

* * * * *

Minnesota

Duluth

Survey Area

Minnesota:
    Carlton
    St. Louis
Wisconsin:
    Douglas

Area of Application. Survey Area Plus

Minnesota:
    Aitkin
    Becker (Including the White Earth Indian Reservation portion 
only)
    Beltrami
    Cass
    Clearwater
    Cook
    Crow Wing
    Hubbard
    Itasca
    Koochiching
    Lake
    Lake of the Woods
    Mahnomen
    Pine
Wisconsin:
    Ashland
    Bayfield
    Burnett
    Iron
    Sawyer
    Washburn
* * * * *

North Dakota

Survey Area

North Dakota:
    Burleigh
    Cass
    Grand Forks
    McLean
    Mercer
    Morton
    Oliver
    Traill
    Ward
Minnesota:
    Clay
    Polk

Area of Application. Survey Area Plus

North Dakota:
    Adams
    Barnes
    Benson
    Billings
    Bottineau
    Bowman
    Burke
    Cavalier
    Dickey
    Divide
    Dunn
    Eddy
    Emmons
    Foster
    Golden Valley
    Grant
    Griggs
    Hettinger
    Kidder
    La Moure
    Logan
    McHenry
    McIntosh
    McKenzie
    Mountrail
    Nelson
    Pembina
    Pierce
    Ramsey
    Ransom
    Renville
    Richland
    Rolette
    Sargent
    Sheridan
    Sioux
    Slope
    Stark
    Steele
    Stutsman
    Towner
    Walsh
    Wells
    Williams
Minnesota:
    Becker (Excluding the White Earth Indian Reservation portion)
    Kittson
    Marshall
    Norman
    Otter Tail
    Pennington
    Red Lake
    Roseau
    Wilkin
* * * * *
[FR Doc. 04-2149 Filed 2-3-04; 8:45 am]
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